Fast food business won't close JP
Evidence:
In general, increasing the federal minimum wage would raise the earnings and family income of most low-wage workers and thus lift some families out of poverty—but doing so would cause other low-wage workers to become jobless, and their family income would fall.
https://www.cbo.gov/publication/55681
Some examples of businesses that closed as a result:
Fast food restaurants close following minimum wage hike
California’s new minimum wage law has caused the Fosters Freeze in Lemoore to close its doors.
Daniel Gligich
BY
DANIEL GLIGICH
APRIL 3, 2024
Multiple fast food restaurants in the Central Valley have shut down after the $20 minimum wage law took effect this week.
According to reports, a Fosters Freeze in Lemoore and five Mod Pizza locations in California have shuttered.
https://sjvsun.com/business/fast-food-restaurants-close-following-minimum-wage-hike/
selected quotes from
https://nypost.com/2024/04/04/business/mod-pizza-closes-5-california-locations-as-minimum-wage-law-takes-effect/
Mod Pizza closes 5 California locations as $20-an-hour minimum wage law takes effect
By Social Links forAriel Zilber
Published April 4, 2024,
A popular West Coast pizza chain shuttered five of its California locations shortly before the state enacted its new minimum wage law this month that raises fast-food workers’ pay from $16 an hour to $20.
Mod Pizza — which has 500 locations across the US and Canada and has been dubbed “the Chipotle of pizza” — abruptly closed up shop at its location in Clovis, near Fresno, two weeks ago, according to former employees.
“It just kind of seemed like the right timing, two weeks before all of the fast food locations in California got that increase that we closed,” one fired worker, who was among 15 that were let go, told Fox 26 TV on Tuesday.
Management never explicitly gave a reason for the closure, but workers suspect that the minimum wage law played a role.
The locations of the other four Mod Pizza franchises in California that were recently shuttered were not available.
and more:
LOCAL NEWS
Small businesses concerned over new $20 minimum wage for California fast food workers
sacramento
By Madisen Keavy
April 1, 2024 / 10:20 PM PDT / CBS Sacramento
(...)
"Real-world impacts are already being seen across the business model in California. Businesses are potentially looking at reducing hours, laying off employees," said Jeff Hanscom, the vice president of the International Franchise Association.
https://www.cbsnews.com/sacramento/news/small-businesses-concerns-over-new-minimum-wage-paid-by-california-fast-food-chains/
https://www.investopedia.com/articles/markets-economy/090516/what-are-pros-and-cons-raising-minimum-wage.asp#:~:text=Increasing%20the%20minimum%20wage%20is%20expected%20to%20lift%20individuals%20out,%22State%20Minimum%20Wage%20Laws.%22Cons of Raising Minimum Wage
Among the disadvantages of increasing the minimum wage is the probable consequence of businesses increasing prices, thus fueling inflation.
Opponents argue that raising the minimum wage would likely result in wages and salaries increasing across the board, thereby substantially increasing operating expenses for companies that would then increase the prices of products and services to cover their increased labor costs.
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Increased prices mean a general increase in the cost of living that could essentially negate any advantage gained by workers having more dollars in their pockets. (...)
The same 2022 study mentioned above by the Congressional Budget Office also analyzed how higher wages may result in the elimination of roles. By 2027, the CBO estimated that up to 1.6 million jobs would be lost. By 2032, this would increase to 1.9 million lost jobs.
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Congressional Budget Office. "How Increasing the Federal Minimum Wage Could Affect Employment and Family Income." (...)
The Bottom Line
Raising the federal minimum wage to $15 an hour is a policy goal for many lawmakers. Increasing the minimum wage is expected to lift individuals out of poverty and improve work ethic, however, it also comes with many possible negative implications, such as inflation and a loss of jobs.
at least fast-food workers will win, right? Not necessarily. McDonald’s is also looking to improve productivity to cut down costs in response to this move, and the clearest way to do so would be to continue automating restaurants with kiosks that allow customers to order quickly and efficiently. That means less of a need for employees, which means less of a need for some employees’ jobs.
And, of course, even the ones who hold on to their jobs will see their purchasing power diminish as California drives up the cost of just about everything with artificial wage limits and a wealth of regulations that drive up costs for businesses. Does anyone really win here, other than corporate leaders at McDonald’s and California Democratic politicians who peacock around, claiming they are fighting for the working man?
This is how every massive minimum wage hike works, especially in California, where the ever-rising cost of living is driving low- and middle-class families out of the state. California just made millions of people’s lives harder and celebrated it as a win because California Democrats have no understanding of basic economics and don’t care whether their residents are actually benefiting from these policies or not.
https://www.washingtonexaminer.com/opinion/2454403/californias-latest-minimum-wage-hike-is-already-making-things-worse/
More than likely, the businesses that already closed were marginally profitable. This wage increase was the "last straw." Many small businesses will struggle as a result of this CA wage increase. Big corporations, like Chipotle and McDonald’s, can handle the stresses more easily and this too will negatviely impact much smaller businesses.
Probably due to their terrible parents (that were also raised badly) that make up all the asenine drivers on the road. [/rant]
